Excuse me, is it really 2011? Remember those days of iron ore at US$190 a tonne back in 2011? Clive Palmer was a hero (not nearly broke), Nathan Tinkler was a giant (and now broke), Twiggy Forrest was a giant (now diminished) and Gina Rinehart became the world’s richest woman. Are they coming back after iron ore prices surged 19% in a day yesterday to a new 2016 high? Oil hit US$40 a barrel overnight for the first time this year, and copper prices are up 17% since the multi-year lows of late 2015. Even thermal coal is going for a bit of a "run" (up a whole 2% in the past week). Gold has boomed, too, and share markets have soared, but iron ore is the focus -- not unsurprisingly, given its dominance of Australian economic and business commentary. According to the two main global measures of the market for ore, the Steel Index and Metal Bulletin, the spot price jumped 19% yesterday to more than US$62 a tonne (Index) and more than US$63 a tonne (Bulletin). The reason? Well, if you can believe it, traders were "encouraged" by the forecasts for Chinese economic growth for 2016 of 6.5% to 7% and a budget deficit of 3% of GDP, or more than US$300 billion. Iron ore prices have risen 46% so far this year and are up 70% since hitting a record low of just over US$38 a tonne in December, and no one saw that coming. It’s no wonder Fortescue shares surged 24% yesterday and BHP shares have rebounded more than 34% since the lows earlier in the year, and shares in Arrium, the struggling iron ore miner and steel group, bounced 33% yesterday alone to 24 cents. -- Glenn Dyer

Newtonian economics? The question is for how long can the price remain at current levels. It means billions of dollars in extra revenue a year for the industry, BHP, Rio Tinto, Fortescue and others and for the WA and federal government in tax and royalty revenues. So those muted cheers are WA Premier Colin Barnett and federal Treasurer Scott Morrison urging prices to go on rising. The longer it goes on, the more our terms of trade will stabilise, rather than continuing to fall (down 12% in 2015). But Goldman Sachs, which missed the surge completely from the start of the year onwards, warns that the boomlet will be “short-lived". And with Gina Rinehart’s Roy Hill mine flooding the market with an extra 55 million tonnes of ore a year, and more coming from a new big mine in Brazil, Goldman Sachs would seem to be on safe ground. I think of that well-known, pre-classical economist Isaac Newton’s law: what goes up must come down. -- Glenn Dyer